Tuesday, March 9, 2010

Tuesday 03/09/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
StockTwits is a great tool to observe crowd behavior among the group of traders who post their market thoughts day in and day out (myself included), and you can see how having a strong bias can have an adverse affect on one's trading. Based on watching the $ES_F stream on StockTwits, you can see that a lot of short-term traders have been entering the market with a decidedly Bearish bias for the past few days. Now, I'm not saying their bias is right or wrong and the S&P 500 could easily pullback 2-3% but shorting every new high on up-trend days too early in the day is not only painful and frustrating but also keeps you out of profitable trade opportunities on the other side. I know that pain/frustration all too well since this used to be a BIG problem for me, and it's something I'm still working on but over time, it has become less of an issue. I wasn't around for the Long entry at Initial Support in the morning due to my daily meetings, but I also didn't enter short until price was trading in the 1142.50-1145 area. Btw, in a trending environment, the Key Levels also serve as potential target areas for trend trades, so in today's case the 1142.50-1144 Resistance Zone was a great place to scale out of Longs. Despite pulling back 9 handles from the day's high (1145.25), ES still managed to close on strength above the Mid-Point and Initial Balance High. At this point, I'm anticipating 1132-1136 to act as Stronger Support, which means if we break that area, we could see momentum pick up to the downside with a test of 1126.

ES 5-Minute Chart

ES 30-Min Volume Profile Chart

ES Day Session Volume Profile Chart

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